You could save hundreds of dollars this month #CashNews.co

With a new year comes new resolutions, often tied to our personal, health, and financial goals. Many Americans may be looking to save more money, eat healthier, commit to a fitness regimen, or, in some cases, cut out alcohol.

According to a 2023 Gallup poll, 62% of US adults drink alcohol. About 1 in 5 adults who drink said they sometimes drink more than they think they should.

Too much alcohol can certainly have negative impacts on your mental and physical health; taking a break from drinking can serve as a much-needed reset. That’s a big part of why “Dry January” is growing in popularity.

But if you decide to participate this year, you might find that abstaining from alcohol for 31 days could benefit your wallet too.

After a festive holiday season, some people feel the need to hit the pause button on their alcohol consumption. Enter Dry January, a challenge officially started in 2013 by Alcohol Change UK, which encourages adults to abstain from drinking alcohol for the entire month.

The challenge is meant to be a total reset, leading to higher energy levels, increased productivity, improved sleep, and other health benefits. About a quarter of Americans successfully completed Dry January in 2024, according to a survey by CivicScience. That’s up from 16% in 2023.

However, resolving to go alcohol-free in January may not only be good for your health — experts say your finances can benefit as well.

Read more: 5 psychological money hacks to cut spending and increase savings

“So many of us think about our physical and mental health at this time of the year; make a resolution to put your financial health in that same bucket,” said Emily Irwin, Wells Fargo senior director of advice, in an interview with Yahoo Finance. “When you think about Dry January, that really means take a step back and only spend on necessities.”

After all, the costs associated with drinking extend beyond the price of booze.

Americans spend an average of $583 on alcohol each year, according to Own Your Limits, an educational campaign run by the Department of Defense. That’s about $50 per month — but it could be more, depending on your alcohol consumption and drink of choice.

Then there are all the other potential expenses involved in a night of drinking: tipping the bartender, a taxi or rideshare home, that late night pizza you probably wouldn’t have ordered if you weren’t buzzed.

There are also indirect, long-term expenses you might reduce by cutting back on alcohol, such as medical costs or even insurance premiums.

Dry January can present a great opportunity to be more mindful of your spending in general. So while you’re at it, take a look at your budget and see if there are other ways you can cut back on unnecessary spending in January and beyond.

Read more: Your complete guide to budgeting for 2025

If you decide to take on the dry January challenge, there are a few steps you can take to set yourself up for success and get the most out of your alcohol-free month:

• Plan out your social calendar ahead of time: Take a look at your plans for this month and identify any potential triggers or social situations where you might be tempted to drink. Come up with a strategy for how to handle them, like meeting up with friends at the local coffee shop rather than a cocktail bar. If you think you may give into temptation, planning ahead and making sure you’re in the right environment can make it easier to stick to your goal.

• Let friends and family know you’re taking on the challenge: Give your loved ones a heads up that you’re avoiding alcohol for the month, especially if you feel you might need extra support or an accountability partner.

• Swap out your drink of choice for a mocktail: Many bars and restaurants offer alcohol-free versions of your favorite cocktails and other specialty nonalcoholic beverages. Look up menus to find out what nonalcoholic options are available and decide what you’re drinking ahead of time. That way, you can still enjoy going out without breaking your alcohol-free streak.

• Set a goal: What will you do with your newfound savings? Choosing a goal — whether it’s establishing an emergency fund or saving up for a spring break vacation — can help you stay motivated to stick with Dry January and enjoy the results of your hard work.

• Check in with yourself: Depending on your previous relationship with alcohol, going cold turkey can sometimes lead to negative side effects. Pay close attention to how you’re feeling and note any changes, such as increased anxiety or headaches. You may want to discuss these symptoms with your doctor.